Is Apple Disrupting The US Market For Nokia And Does Nokia Really Care?

Nokia LogoYesterday, Nokia published their Form 20-F report atlas, this thing is 220 pages. Buried on Page 57 you’ll find the Global Mobile Device Volume By Geographical Area report which indicates strong growth around the Globe. The anomalistic region for Nokia though is North America, where in 2007 they faced a declining demand for their products to the tune of 5.9 million devices.

Nokia Mobile Device Volume by Geographical Area

These results are for the fiscal year ending on December 31, 2007 and so it might make sense to recognize the events of June 29th, 2007… Apple launching the iPhone. I don’t know if Apple was entirely responsible for the decline but you could probably make an argument that a combination of iPhone buyers between June 29th, 2007 and December 31, 2007 coupled with consumers that had plans to go iPhone once their contract was up might have accounted for some of it, wouldn’t you think?

Nokia says it’s because they were ramping down their CDMA business, and you have to dig around the report to find evidence of this but they’re basically just blowing off the decline as sort of a so what by not addressing it. These are the only statements I could find that address it.

During 2007, we gained device market share in all regions except North American and Latin America, where our market share declined.

In North America, our market share declined in 2007. The lower market share in North America in 2007 was primarily driven by our much lower CDMA device volumes compared to 2006, as we effectively ramped down our existing CDMA business during 2007

Maybe they’re right considering that they produce 1.5M handsets per day. What’s 5.9M phones when you’re cranking that out every 3.9 days and plugging them into other less restrictive and growing channels?

The North American market requires customized specifications that don’t exist in other markets which has an impact on Nokia’s profits and after sale service abilities. So perhaps they’re happy to let it go until the economies of scale as they put it are in their favor?

You can grab the pdf here if you want it.